Majak v Byrnes

[2022] NSWDC 222

District Court

New South Wales

Medium Neutral Citation:

Majak v Byrnes & Anor [2022] NSWDC 222

Hearing dates:

16 June 2022

Date of orders:

23 June 2022

Decision date:

23 June 2022

Jurisdiction:

Civil

Before:

Russell SC DCJ

Decision:

(1)   Dismiss the plaintiff’s Notice of Motion filed on 24 March 2022.

(2)   Order the plaintiff to pay the costs of the defendants of and incidental to the Notice of Motion.

(3)   Direct that the Exhibits and MFIs be returned.

Catchwords:

PROCEDURE – application to set aside orders made after hearing – whether orders made irregularly, illegally or against good faith

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW), rr 13.4, 36.15

Bankruptcy Act 1966 (Cth), s 263A

Cases Cited:

Bobolas v Waverley Council [2014] NSWCA 131

Choi v Commissioner of Police, New South Wales Police (No. 2) [2021] NSWCA 290

Coles v Burke (1987) 10 NSWLR 429

Perpetual Trustees Australia Ltd v Heperu Pty Ltd (No. 2) [2009] NSWCA 387; (2009) 78 NSWLR 190

Kendell v Carnegie [2006] NSWCA 302; (2006) 68 NSWLR 193

Texts Cited:

Ritchie’s Uniform Civil Procedure NSW, (LexisNexis looseleaf service)

Category:

Procedural rulings

Parties:

Zofia Bozena Majak (Plaintiff) (Self-represented)
Russell Craig Byrnes trading as Byrnes Legal (First Defendant)
Alan Wesley Rose (Second Defendant)

Representation:

Counsel:
G Ng (First Defendant)
J-J Loofs SC and L James (Second Defendant)

Solicitors:
YPOL Lawyers (First Defendant)
Visa and Citizenship Lawyers (Second Defendant)

File Number(s):

2020/361633

Judgment

Introduction

1. This judgment concerns an application by the plaintiff Ms Zofia Majak to set aside a summary judgment in favour of the defendants. Ms Majak and the second defendant Mr Rose were in a de-facto relationship some years ago. Litigation between the former partners has taken place at every level of the court system. The first defendant Mr Byrnes is a solicitor who has represented Mr Rose in some of that litigation.

2. As a result of a judgment for costs against Ms Majak, obtained by Mr Rose in one of the many proceedings between them, a bankruptcy notice was issued against Ms Majak. Mr Byrnes was the solicitor who acted for Mr Rose in obtaining the issue of the bankruptcy notice.

3. By her Statement of Claim filed in this court Ms Majak sought the following relief:

“1.   A Declaration that neither of the defendants had any genuine basis for issuing a bankruptcy notice against the Plaintiff or that there were any proper facts that justified evoking the bankruptcy process.

2.   A Declaration that the bankruptcy notice was an abuse of process.

3.   A Declaration that by consequence of their conduct and involvement in relation to issuing a bankruptcy notice and opposing the application to stay the bankruptcy notice, the defendants utilised the bankruptcy process as an instrument of oppression against the Plaintiff, whereby she was greatly harmed and injured.

4.   A Declaration that the First Defendant acted dishonestly, swearing an Affidavit in which he denied having knowledge of facts ascertained by him prior to issuing the bankruptcy notice, which would have prevented any reasonable legal practitioner from engaging a bankruptcy process against the Plaintiff.

5.   Damages – Actual, Compensatory, Punitive;

6.   Interest;

7.   Costs;

8.   Such further or other orders as the Court considers appropriate.”

4. Mr Byrnes filed a Notice of Motion on 10 February 2021 seeking dismissal of Ms Majak’s proceedings pursuant to r 13.4(1) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), or in the alternative, on the basis that the District Court did not have jurisdiction to make the declarations sought.

5. Mr Rose filed a Notice of Motion in similar terms on 19 February 2021.

6. The two motions came on for hearing before Judge Olsson SC on 14 May 2021. On 25 February 2022 her Honour delivered a written judgment (unreported) dismissing the plaintiff’s proceedings pursuant to r 13.4(1) UCPR and ordering the plaintiff to pay the costs of the defendants. In a subsequent judgment dated 22 March 2022 (unreported) her Honour varied the costs order so as to order the plaintiff to pay the first defendant’s costs on the ordinary basis and the second defendant’s costs on an indemnity basis from the commencement of the proceedings.

7. Ms Majak filed a Notice of Motion on 24 March 2022 seeking the following orders:

“1. That the order (1) to dismiss the proceedings pursuant to Rule 13.4 (1) of the UCPR be set aside, pursuant to Reg. 36.15 of the UCPR.

2.   That the cost orders made on 22 March 2022 be set aside.

3. That the evidence submitted during the hearing on 14 May 2021, proving that Russell Byrnes filed a false Affidavit in the Federal Circuit Court, in the Bankruptcy proceedings No SYG 3857/2017, sworn on 16 January 2018, be forwarded to the Office of the Director of Public Prosecutions, to be prosecuted pursuant to Sect 263A of the Bankruptcy Act 1966.

4.   That leave be granted to the Applicant to amend and update the statement of claim.”

8. That motion came on for hearing before me on 16 June 2022. Ms Majak represented herself. Mr G Ng of counsel appeared for Mr Byrnes. Mr J-J Loofs SC and Mr L James of counsel appeared for Mr Rose.

9. Ms Majak relied upon two affidavits, dated 24 March 2022 (PX 1) and 16 May 2022 (PX 2). The defendants filed no evidence. In accordance with directions made by the Judicial Registrar, the defendants served their written submissions first (MFI 1 and MFI 2) and thereafter Ms Majak served her written submissions (MFI 3).

Rule 36.15 UCPR: Principles

10. Ms Majak’s Notice of Motion filed on 24 March 2022 specifically stated that it was an application made pursuant to r 36.15 of the UCPR.

11. Rule 36.15 of the UCPR says:

“36.15 General power to set aside judgment or order

(1) A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith.

(2) A judgment or order of the court in any proceedings may be set aside by order of the court if the parties to the proceedings consent.”

12. Ms Majak made it plain in her oral submissions that the order for dismissal of the proceedings made against her was made irregularly and/or illegally and/or against good faith.

13. A judgment or order which is made irregularly ordinarily requires that there be some contravention of the rules in relation to the entry of the judgment or order, whereas illegality or lack of good faith usually involves some wrongdoing or improper conduct in relation to the procurement of the relevant judgment or order: Bobolas v Waverley Council [2014] NSWCA 131 at [27].

14. In Coles v Burke (1987) 10 NSWLR 429, Kirby P said at 437C:

“The genus which is involved in the phrase ‘irregularly, illegally or against good faith’ appears to me to be misconduct or dishonourable conduct of the person who procured the judgment which it is suggested undermines the authority of that judgment warranting the exceptional course for which [the rule] provides.”

15. The focus of the rule is on the steps taken to enter or make the judgment or order, not on the merits of any decision, or the irregularity of other steps in the proceedings, or in the proceedings below: Perpetual Trustees Australia Ltd v Heperu Pty Ltd (No. 2) [2009] NSWCA 387 at [16]; (2009) 78 NSWLR 190 at 193; Choi v Commissioner of Police, New South Wales Police (No. 2) [2021] NSWCA 290.

16. In Kendell v Carnegie [2006] NSWCA 302; (2006) 68 NSWLR 193 at [60], the Court of Appeal said:

“There is not and could not, I would think, ever be an exhaustive judicial definition of what is against good faith; only very broad limits are set by proceeding by analogy from circumstances in which judicial remedies are based on good faith, unconscionability or other concepts closely related to good faith… ‘against good faith’ is an expression which requires the impeachment of the intention or behaviour of the person whose good faith is impugned.”

17. The learned authors of Ritchie’s Uniform Civil Procedure NSW, (LexisNexis looseleaf service) give the following examples of cases where a judgment or order has been set aside because it was obtained against good faith:

1. A default judgment signed contrary to the terms of a contract between the parties.

2. A judgment obtained contrary to a promissory representation.

3. Proceeding to judgment in the absence of notice to the defendant where the plaintiff ought to have known the matter was contested and the absence was due to some mistake.

4. Judgments involving consent orders and transfers made for the purpose of defrauding creditors.

5. Failure to make disclosure of an admitted claim by a secured creditor in procuring an order for payment made out of court, without disclosure of an admitted claim.

6. A consent judgment that deals only with part of a claimant’s loss and, to the parties’ knowledge, would preclude other subrogation claims by an indemnifying insurer.

7. A judgment obtained against a guarantor whose submitting appearance was known to have been filed without instructions, and whose relevant psychiatric condition was known to the judgment creditor but not disclosed to the court.

Evidence for the Plaintiff

18. Both affidavits of Ms Majak contained material which was argumentative and, to some extent, speculative. Because Ms Majak was unrepresented I afforded her leniency in relation to the admissibility of her affidavits. I did make a limiting order in relation to many of the paragraphs in both affidavits, so that those paragraphs were received only as evidence of Ms Majak’s belief and as submissions she wished to make in support of her application brought by the Notice of Motion.

19. The primary contention put forward by Ms Majak as to why the order for dismissal made by Judge Olsson SC was made against good faith, arose out of written submissions provided to Judge Olsson SC by counsel then appearing for the second defendant.

20. Counsel provided written submissions at 8.47am on 14 May 2021, being the morning of the hearing of the Notice of Motion. Ms Majak explained that she left her home on the Central Coast at around 7.00am that morning to travel to Sydney for the hearing. She was on a train at the time she received the email from counsel which attached his written submissions. She had no knowledge that counsel intended to put in any written submissions.

21. In par 7 of PX 1 Ms Majak contended that the submission “was sent to me by the way of ambush on purpose, as a strategy to prevent me from preparing any response to [counsel’s] arguments and subsequently prevent the court from making a decision based on relevant considerations”.

22. At a general level, I reject that contention. Motions in the District Court used to be run by the parties attending on the morning of the hearing and making oral submissions only. In recent years the practice has grown up of counsel providing a written outline of submissions to the court. This is something done voluntarily and not pursuant to any direction made prior to the hearing of the motion.

23. Ms Majak could not have complained if counsel had not filed any written submissions, but had simply turned up to the hearing and made those submissions orally. If Ms Majak was taken by surprise by the submissions, she could have sought an adjournment from Judge Olsson SC, or at least ask for the matter to be stood in the list while she absorbed the submissions and formulated her counter arguments. No such application was made.

24. Further, there was a lengthy period between the hearing of the motion and delivery of the written judgment. If, on further consideration, Ms Majak had wanted to further answer the written submissions by counsel, she could have applied for the matter to be re-listed for that purpose. No such application was made.

25. There is no evidence whatsoever that the written submissions were provided on the morning of the hearing by way of ambush, or as a strategy to prevent Ms Majak from preparing any response to the arguments set out in counsel’s written submissions. Further, there was no evidence whatsoever that the written submissions were served to “prevent the court from making a decision based on relevant considerations”.

26. I turn to consider the particular parts of the written submissions about which Ms Majak makes complaint.

27. The first criticism made of the written submissions is in pars 11-12 of PX 1. This was a submission of law concerning whether the issuing of a bankruptcy notice involved an improper purpose. Counsel was perfectly entitled to make that submission and it was a matter considered and decided by Judge Olsson SC. Unfortunately, Ms Majak often takes the position in her affidavits and submissions that any submission made in opposition to her contentions is necessarily a submission made in bad faith. The adversarial process allows for, and indeed needs, competing contentions both as to law and fact to be put before a court for decision. It is up to a judge of the court to decide whether or not a submission is accepted or rejected. Ms Majak has not filed an application to the Court of Appeal in relation to the decision of Judge Olsson SC and made it plain during oral submissions that she was not appealing against any of the findings of her Honour.

28. I reject the first criticism made of the written submissions.

29. The second criticism is set out in pars 13–14 of PX 1 and relates not to the written submissions, but to an affidavit dated 19 February 2021 by Mr Byrnes, filed in support of the Notice of Motion seeking summary dismissal of the plaintiff’s proceedings. The part of the Byrnes affidavit which is the subject of criticism relates to evidence that at the time of serving the bankruptcy notice Mr Rose had outstanding debts to lawyers of $400,000 with no means of paying such debts apart from obtaining a garnishee order on the plaintiff’s salary or a sale of assets. Ms Majak contends that this part of the affidavit provides evidence of “improper purpose” in relation to the bankruptcy notice. As the authorities recited above state, it is not relevant to have regard to whether there was an improper purpose in relation to any other proceedings (in this case the issuing of the bankruptcy notice). What is necessary is for an applicant to show that there is some irregularity or bad faith in obtaining the order for dismissal of the District Court proceedings. The contention in pars 13-14 of PX 1 is a matter which could have been put before Judge Olsson SC for consideration. It is not a relevant matter on the present application.

30. The next criticism of the written submissions is to be found in par 15 of PX 1. Counsel submitted that while a bankruptcy notice was issued, the proceedings were neither commenced nor pursued in the bankruptcy jurisdiction.

31. Once again, this is a submission of law properly put in the adversarial process by counsel for one of the parties. It is up to a trial judge to decide whether to accept or reject that submission of law. It is not evidence of bad faith to put an arguable submission of law.

32. The next criticism made of the written submissions is to be found in pars 17-26 of PX 1. Counsel submitted that there was no suggestion that either defendant obtained an advantage with respect to the bankruptcy notice, particularly since there was consent given to that notice being set aside with costs in favour of Ms Majak. In par 23 of PX 1 Ms Majak stated that she believed that Mr Byrnes intended to bankrupt her to prevent her from representing herself in the Family Court. In par 24 of PX 1 Ms Majak alleged that by seeking a garnishment order Mr Byrnes caused damage to Ms Majak’s reputation at work.

33. These allegations might theoretically be relevant to alleging bad faith in the bankruptcy proceedings, which was the gist of the relief sought in these District Court proceedings. However, an application under r 36.15 UCPR looks for evidence of bad faith in obtaining the order for dismissal of the proceedings, and not whether or not there was bad faith in the bankruptcy notice allegations pleaded in the Statement of Claim. The question of whether or not there was some ulterior purpose for issuing the bankruptcy notice, and the question of whether or not the issuing of the bankruptcy notice was an abuse of process, was fairly and squarely before Judge Olsson SC for decision as a matter of law. Her Honour decided the matter adversely to Ms Majak and there has been no appeal from her Honour’s decision. An application under r 36.15 UCPR is not an occasion for challenging, by a sidewind, the correctness of the decision to dismiss the plaintiff’s proceedings.

34. Once again, it is not bad faith for counsel to make a submission about whether or not there was a proper purpose for the issue of the bankruptcy notice. This was fairly and squarely a legal issue which arose because of the plaintiff’s Statement of Claim. Counsel was perfectly entitled to put a submission on that issue of law for decision by the court. Just because Ms Majak disagreed with it, does not mean that the submission was put in bad faith.

35. The next criticism of the written submission is to be found in pars 27-34 of PX 1. Ms Majak submits that counsel was aware that Mr Byrnes was at risk of a custodial sentence, because he had sworn a false affidavit and could be dealt with under s 263A of the Bankruptcy Act 1966 (Cth). This submission is misconceived for a number of reasons. Firstly, there is no evidence to satisfy me that Mr Byrnes was ever at any such risk. Secondly, Ms Majak has elided her belief that Mr Byrnes filed a false affidavit in the District Court proceedings, with the notion that such affidavit could be dealt with under the Bankruptcy Act provision. Further, there was no evidence to satisfy me that counsel put forward his written submissions for any reason other than properly advocating the cause of his client on the Notice of Motion heard by Judge Olsson SC.

36. In par 34 of PX 1 Ms Majak went so far as to allege that by continuing to act in the matter, counsel “engaged in fraud upon the court by making submissions to achieve a collateral advantage for his instructing solicitor Russell Byrnes”. I reject that allegation entirely. If it had been made by a legal practitioner, there would be professional consequences for making such an assertion unsupported by evidence. Because Ms Majak is self-represented, those consequences do not apply to her. I record that it is an outrageous allegation and one entirely without foundation.

37. The next criticism of the written submissions appears in pars 35-49 of PX 1. In par 15 of the written submissions counsel, having recited the labyrinth of litigation between the parties, made the following comment:

“It is the plaintiff who has abused and continues to abuse the court process as demonstrated by these current proceedings.”

38. I regard that as an acceptable flourish in the written submissions. It is a comment made in the context of the plaintiff’s own proceedings in this court alleging that the defendants had been guilty of the intentional tort of collateral abuse of court process. I do not regard the contention in the written submissions as demonstrating a lack of good faith. There is no indication in the judgment of Judge Olsson SC that her Honour did anything with that flourish, except ignore it.

39. The next criticism made by Ms Majak concerns costs submissions made by the same counsel. One of those submissions was that “no commercial offer of settlement was made by the plaintiff”. Ms Majak deals with this in pars 53-59 of PX 1. In par 56(a) of PX 1 Ms Majak accepts that there were never any commercial offers made in relation to any aspect of the case. In par 56(b) of PX 1 Ms Majak says that there was no opportunity for offers to be made. In par 59 of PX 1 Ms Majak submits that the submission to the effect that there was no commercial offer of substance made by the plaintiff was made without factual or legal basis. This seems to be directly contradicted by Ms Majak’s acceptance of the fact that there was no offer made, and her assertion that there was no opportunity to make any offer. In those circumstances it is impossible to see how bad faith could be alleged.

38. In pars 60-73 of PX 1 Ms Majak makes a submission about the effect of the submissions by counsel upon the judgments given by Judge Olsson SC. Those paragraphs do no more than re-assert the matters put to Judge Olsson SC by Ms Majak and dealt with by her Honour in the two judgments. As Ms Majak acknowledged more than once in oral submissions on this motion, she has not and does not intend to appeal against either decision of Judge Olsson SC. An application under r 36.15 UCPR is not an opportunity for an applicant to re-run arguments which have failed before a trial judge. If the trial judge made a mistake, then the proper avenue for dealing with such mistake is by application to the Court of Appeal.

39. The second affidavit of the plaintiff (PX 2) was filed pursuant to a direction that the plaintiff file evidence in reply. After the first affidavit of Ms Majak (PX 1), the defendants filed no evidence. There was thus nothing to reply to. Nevertheless I allowed the second affidavit into evidence, as part of the latitude granted to Ms Majak as a self-represented litigant.

40. However, the material in PX 2 is really of no assistance to Ms Majak. In par 9 of PX 2 Ms Majak says that proceedings held in other jurisdictions after the District Court hearing provide evidence showing that the defendants inappropriately moved for summary dismissal of the District Court proceedings.

41. In this category Ms Majak has included allegations arising out of proceedings in the Federal Circuit Court concerning a second bankruptcy notice, proceedings in the Supreme Court of New South Wales heard and determined by Justice Rothman, matters concerning Mr Rose obtaining an AVO order against Ms Majak, a police report relating to allegations of physical threats said to have been made by Ms Majak towards Mr Rose, a forged signature on a land title document and certain bills of costs rendered by Mr Byrnes.

42. The submissions made by Ms Majak in relation to PX 2 were difficult to follow, as in her mind every step in every proceeding is related to everything done in every other proceeding. Suffice it to say that this material concerning events after the hearing before Judge Olsson SC casts no light upon the way in which the application for dismissal of the District Court proceedings was conducted by either defendant.

43. Most of PX 2 consisted of supposition, allegation and submissions. I made a limiting order in respect of most of the paragraphs of PX 2, so that they were received only as evidence of the belief of Ms Majak and her submissions. Those paragraphs did not provide evidence relevant to the issues before me in the application under r 36.15 UCPR.

Conclusion in Relation to Rule 36.15 UCPR

46. The judgments of Judge Olsson SC were not in any sense entered irregularly. There was full compliance with the rules and a hearing on the merits.

47. Nor were such orders induced illegally. While Ms Majak in oral submissions said that she relied upon this limb of r 36.15 UCPR, there was no submission as to why there was any illegal conduct which led to the orders of Judge Olsson SC, and there was no evidence to suggest that there was any illegality.

48. For reasons set out above, Ms Majak has not satisfied the court that the orders of Judge Olsson SC were procured against good faith.

49. That part of the Motion seeking orders under r 36.15 UCPR fails.

Application in relation to s 263A of the Bankruptcy Act 1966 (Cth)

50. Section 263A says:

“A person who intentionally makes a false statement in an affidavit to be used for the purposes of this Act commits an offence and is punishable:

(a)   upon summary conviction – by imprisonment for a period not exceeding six months or a fine not exceeding two penalty units, or both; or

(b)   upon conviction on indictment – by imprisonment for a period not exceeding four years.”

51. Ms Majak has not satisfied the court that any incorrect part of the affidavit of Mr Byrnes was an intentional false statement.

52. Further, the District Court cannot be expected to run some sort of inquiry or committal hearing as to whether there has been a breach of the Bankruptcy Act.

53. If a judge, during the course of a hearing in the District Court, comes to the view that an offence might have been committed, then the judge may refer the papers to the appropriate authorities for consideration. Such a judge does not embark upon making a finding that the evidence proves that there was the commission of a criminal offence, as Ms Majak seeks in par 3 of the Notice of Motion. Nor does the judge forward the papers to the Director of Public Prosecutions for the deponent of an affidavit to be prosecuted. All that happens, at its highest, is that the papers are referred, without further comment, for the Director of Public Prosecutions to consider them.

54. I decline to make the order sought in par 3 of the Notice of Motion.

Conclusion and Orders

55. For the reasons set out above the application made by Ms Majak by Notice of Motion filed on 24 March 2022 is unsuccessful.

56. I will make a costs order against Ms Majak and in favour of both defendants. I will not make an indemnity costs order, as sought by counsel for the first defendant (MFI 2, par 27). The submission was that such an order should be made so that Ms Majak could be made to understand that it is inappropriate to seek repeatedly, and without a proper basis, to re-contest issues decided adversely to her.

57. I see no point in making yet another costs order which will pile up alongside the others made in different courts against Ms Majak. If Mr Byrnes holds the opinion of Ms Majak expressed in par 27 of MFI 2, then he has a remedy elsewhere. However, I do not wish to suggest or encourage any further litigation between these parties.

58. The orders of the court are:

1. Dismiss the plaintiff’s Notice of Motion filed on 24 March 2022.

2. Order the plaintiff to pay the costs of the defendants of and incidental to the Notice of Motion.

3. Direct that the Exhibits and MFIs be returned.

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Decision last updated: 23 June 2022